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Why You Should Own Facebook Now: Gene Munster

On Wednesday, the Street was finally able to initiate coverage on Facebook, 40 days after the IPO.

And it seems widely followed Piper Jaffray analyst Gene Munster may have found a new object of affection.

During a live interview on CNBC’s Fast Money Halftime Report he sounded almost as enthusiastic about Facebook as he's been about Apple (and if you follow tech at all, you know how much Munster loves Apple.)

Although Munster concedes that in the near-term Facebook may be facing headwinds, he tells us that “Given what they’re doing, to even think about the next 6 months is missing the whole point,” he says.

Ahead of the broadcast Munster told us there are a few big reasons investors should own Facebook.

They are:
- Trades significantly below company’s long term EBITDA
- Extremely unique property online

But aside for the reasons mentioned above - Munster believes there's another upside catalyst and it's a doozy. In fact, it's the same catalyst famed venture capitalist Roger McNamee told us back on May 18th, the day of the IPO. Facebook is about to change the way we shop.

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In case you’re curious here’s how the Street rates Facebook:

FirmFM Rating Price Target
JPMorgan Overweight$45
GoldmanBuy$42
Oppenheimer Outperform$41
Piper JaffrayOverweight$41
RBCOutperform$40
Wells FargoOutperform$37-$40
Morgan StanleyOverweight$38
BofANeutral$38
StifelHoldNA
CitiNeutral$35
BarclaysEqual-Weight $35
Credit SuisseNeutral $34
BMO Capital Underperform $25

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That’s because of the Facebook Connect feature, which allows people to log onto all sorts of other sites using their Facebook credentials. In years to come Facebook Connect could make it very convenient to use a mobile device rather than a bank card to pay for - well - everything.

I fully expect that “Facebook will change how people buy things,” explains Munster.

And as a result, Munster is all but certain Facebook will show accelerating revenue growth in the years ahead. Declining revenue growth has been a big criticism cited by Facebook skeptics.

“As Facebook re-accelerates revenue, the multiple should go up and as a result, the stock will go up,” insists Munster.

Of course not everyone on the Street is bullish. Pivotal Research analyst Brian Wieser isn't.

Although he agrees with Munster that Facebook has long-term potential, he sees no reason to hit the buy button right now. “A large number of shares are coming onto the market as the lock-up expires,” he says. “That alone will put pressure on the stock.

Wieser has a $30 price target on the stock.

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Posted by CNBC's Lee Brodie

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Trader disclosure: On June 27, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Stephen Weiss is long QCOM; Stephen Weiss is long AMLP; Stephen Weiss is long AMTG; Stephen Weiss is long VZ; Stephen Weiss is long T; Stephen Weiss is long VOD; Stephen Weiss is short X; Stephen Weiss is short MT; Stephen Weiss is short JCP; Stephen Weiss is short JEC; Simon Baker is long AAPL; Simon Baker is long NVDA; Simon Baker is short AMZN; Simon Baker is long HES; Mike Murphy is short WMT; Mike Murphy is long TGT; Mike Murphy is long SBUX; Mike Murphy is long LEN; Mike Murphy is long TOL

For Gene Munster
The following companies have been investment banking clients of Piper Jaffray during the past 12 months: FB
Piper Jaffray expects to have the following companies as investment banking clients within the next three months: FB
Other material conflicts of interest for Gene Munster or Piper Jaffray regarding companies in my universe for which I am aware include: FB
Piper Jaffray makes a market in the securities of the following companies, and will buy and sell the securities of these companies on a principal basis: FB

For Bill Featherston
UBS AG, its affiliates or subsidiaries beneficially owned 1% or more of a class of the following companies' common equity securities as of last month`s end (or the prior month`s end if this report is dated less than 10 days after the most recent month`s end): CHK
UBS AG, its affiliates or subsidiaries beneficially owned 1% or more of a class of the following companies' common equity securities as of last month`s end (or the prior month`s end if this report is dated less than 10 days after the most recent month`s end): OXY
The U.S. equity strategist, a member of his team, or one of their household members has a long common stock position in XOM
The U.S. equity strategist, a member of his team, or one of their household members has a long common stock position in OXY
This company/entity is, or within the past 12 months has been, a client of UBS Securities LLC, and investment banking services are being, or have been, provided.: APC
This company/entity is, or within the past 12 months has been, a client of UBS Securities LLC, and investment banking services are being, or have been, provided.: CHK
This company/entity is, or within the past 12 months has been, a client of UBS Securities LLC, and investment banking services are being, or have been, provided.: COP
This company/entity is, or within the past 12 months has been, a client of UBS Securities LLC, and non-investment banking securities-related services are being, or have been, provided.: CVX
This company/entity is, or within the past 12 months has been, a client of UBS Securities LLC, and non-investment banking securities-related services are being, or have been, provided.: COP
This company/entity is, or within the past 12 months has been, a client of UBS Securities LLC, and non-investment banking securities-related services are being, or have been, provided.: XOM
This company/entity is, or within the past 12 months has been, a client of UBS Securities LLC, and non-securities services are being, or have been, provided.: APC
This company/entity is, or within the past 12 months has been, a client of UBS Securities LLC, and non-securities services are being, or have been, provided.: CVX
This company/entity is, or within the past 12 months has been, a client of UBS Securities LLC, and non-securities services are being, or have been, provided.: COP
Within the past 12 months, UBS Securities LLC has received compensation from this company/entity: APC
Within the past 12 months, UBS Securities LLC has received compensation from this company/entity: CHK
Within the past 12 months, UBS Securities LLC has received compensation from this company/entity: COP
Within the past 12 months, UBS Securities LLC has received compensation from this company/entity: MRO




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